How (and how not) to Manage Successful Growth Initiatives in Your Organization

According to the Harvard Business Review, few companies are growing at a rate that will ensure long-term survival. Innovation and enterprising new ventures seem to hold out promise to address this dilemma, but all too often, CEOs and Senior Management are mired in the (admittedly important) business of managing earnings and do not do enough of the right things to foster success with the new initiatives.

In their article 6 Ways to Sink a Growth Initiative in the July/August (2013) edition of HBR, authors Donald Laurie and J. Bruce Harreld identify some of the more common problems today’s companies face in mounting a sustainable growth strategy, and offer suggestions and solutions. At Innovaision, we help organizations adopt effective and efficient strategic habits. Sharing good ideas like these is one way we can help you.

Lack of effective oversight is first on the list. As noted, C-level execs are often engaged primarily in overseeing revenue and profit, and do not provide the oversight, occasional guidance, and resources start-up teams need. Establishing the groundwork for a project and then neglecting it often leaves the management team out of the loop on progress, and as teams develop a body of project—related knowledge that outstrips the senior level staff’s comprehension, adding to the problem. Spending meaningful time with the development team, as well as with potential customers, insuring regular oversight meetings and progress reviews, and taking joint responsibility—including taking on some work assignments of their own—can help greatly.

Knowing that the need for growth and expansion can be very critical, it is surprising how many organizations will delegate the project management to relative newcomers, or staff who have experience in a particular area that might be a target for expansion. The best and most seasoned staff are kept in the positions they currently occupy for safety and security reasons. A better choice is to put the most experienced general managers in charge of new projects. These individuals have the organizational knowledge and internal networks needed to insure a new project has the broadest support possible. They are also more likely to be able to see an initiative through from start to finish. These veterans are also more likely to handle project crises well and successfully.

Similarly, staff who are assigned to work on a project are often chosen more on the basis of their availability rather than their skills and experience. Fearful of disrupting the existing channels, the more effective staff stay put while underutilized employees are entrusted with the organization’s future growth. These people are not always the company’s brightest stars (they are often underutilized for good reasons). A better approach is to focus on the tasks that need to be done to make the initiative successful, and match these up with the capabilities of all staff to find the right core team. Also, don’t staff up prematurely, the team composition should be considered fluid, with additional resources added as proof of concept begins to be realized.

Measuring performance of new projects can be confounded if the measuring tools and metrics are those used to manage more mature lines of business. Rather than using traditional benchmarks like revenue, earnings, etc., a startup project might be better evaluated by looking at customer interactions, market testing, and how the team is meeting the milestones of their execution plan.

Likewise, it is important to recognize the difference in funding needs between a startup venture and your established business lines. Most mature businesses have a budget cycle that has been tested and proven useful over many years, but forcing a new project to adhere to an existing funding model can easily spell doom. The ability to set aside irrevocable, long—term funding for new initiatives (assuming milestones are met) is crucial to successful growth. These days, any organization that cannot set aside a reasonable proportion of their budget for R&D activities is staring at a loaded gun.

Finally, although it is nearly mythological (reference the “Skunk Works” originally developed at Lockheed and popularized by management guru Tom Peters), the idea that new projects should somehow be walled off, or even hidden from, the rest of the organization’s operations, the authors of the HBR article beg to differ. A well—established organization possesses a variety of assets and supportive services that can potentiate the success of startup projects. Legal advice, marketing specialists, accounting assistance, and administrative support functions, if they do not have to be provided from scratch, can help new projects become successful, and successful faster than if they had to develop these supports independently of the parent. The C-level staff can insure that new initiatives seek collaborative help that plays into the core resources of the business and that the management of those core resources is well—disposed to make this help available.

Governance and oversight of new ventures is challenging, but the engaged and informed CEO and Senior Management staff can play a vital role in making sure that these ventures, and the overall organization, succeeds.